Windows 10 Setup thinks it's booted from installation media

This has been happening for all Windows 10 Setup builds. Windows Setup will not let me upgrade or downgrade my build (currently 11082) without losing my apps. I always get this message right after I click "Upgrade":

"The computer started using the Windows installation media. Remove the installation media and restart your computer so that Windows starts normally. Then, insert the installation media and restart the upgrade. (Do not select "Custom (advanced)" to perform an upgrade. "Custom (advanced)" installs a new copy of Windows and deletes your programs and settings.)"

I have tried opening setup from flash drives, tried in C:, you name it I tried it, but every time I open setup (I even tried the setup.exe found in the sources folder), it refuses to upgrade due to it thinking "the computer started using the Windows installation media".

Note: The same installation files from the same flash drive worked to upgrade my laptop's Windows 10 build (which was also at build 11082), so I know the files in the installation folder are legit.

Here are some screenshots:

1. I get this when I open setup.exe only on my PC:

2. It then asks me for a key:

3. Then after agreeing to the Windows license policy and clicking on "Upgrade", I get the error which I wrote above.

Any thoughts before I entirely give up upgrading once and for all?